Scotsman Money Budget Round Table

The Scotsman

30/10/2024

Transcript

00:00Hello, I'm Rosemary Gallagher, Head of Commercial Content for The Scotsman.

00:03Today, for the UK Landmark Budget, we've brought together a range of experts

00:07to have a roundtable discussion with myself, Josh King, who's Head of Business for The Scotsman,

00:11Bruce Hendry from Carlton, Ewan Ferney from accountancy firm MHA,

00:15Tom Gillingham from Charlotte Street Partners, and Christy Newell from Burness Paul.

00:19We've now listened to the UK Budget, Rachel Reeves first.

00:23We'll sit down with a panel of experts to discuss what was announced from capital gains tax to inheritance tax,

00:28and find out how our experts think that will affect themselves and their clients.

00:32I think it could have been a lot worse. A lot of the news or speculation was it was going to be a lot worse.

00:40From a personal finance point of view, the change to inheritance tax for pension schemes

00:47will have a big impact on a lot of clients, and that's something I think a lot of people are going to have to

00:52revisit their plans and their strategy.

00:55I think the main questions will centre around capital gains tax and pension planning and inheritance tax

01:01and how that impacts on them. So they've obviously had strategies put in place,

01:06and with the changes to the rules, that may have an impact on them.

01:09So as ever, people are wondering how it's going to affect them, and to see if their plans need altered in any way.

01:15I think she was very, very relieved to finally be giving the budget, to be honest.

01:19I think it's been a long and difficult run-in to the statement itself.

01:23There was a lot to unpack in there, a lot of different moving parts,

01:27but really for her perspective, she'll be worried about the devil being in the detail.

01:31Often what comes out of the budget comes out when the fine tooth comb is applied,

01:35so we'll wait and see what happens when that occurs.

01:38There's a few tricky things in there for Scotland as a whole, actually.

01:42So you're looking at an increase in duty on whisky, rising in line with inflation.

01:47North Sea, the energy profits levy is being unpicked.

01:51There was a headline increase to 38%, which will be felt in the North East.

01:55And actually some of the changes to agricultural business relief, down to a million pounds,

02:02that will sort of suck in a lot of Scottish farms.

02:05So clients will be asking about those specifics, but actually the other part is,

02:09well, what does this mean politically?

02:11I believe she's set a few traps for the SNP.

02:14One, on income tax thresholds being frozen.

02:17I mean, it's not a huge change, but it kind of puts the pressure back on the SNP.

02:21But also how the Barnett consequentials flow through to services, how does that play out?

02:26So there's a few interesting bits in there.

02:28The final point actually is business rates.

02:30That's a devolved issue, but she's sort of looked at reforms,

02:34so people will be asking, what are you going to do in Scotland?

02:37Indeed, it was lengthy.

02:39I guess kind of key takeaways are probably it's not as bad from a tax perspective

02:43as it might have been for investors.

02:46Our clients, a lot of them are shareholders,

02:49and so the capital gains tax rises were not as bad as they might have otherwise been.

02:53We're straight after the budget, so we don't quite know yet

02:56when the increase to 24% and 18% takes effect.

03:00I'm not sure if it's immediately or at the start of the next tax year,

03:03so it'll be interesting to see.

03:05But I think overall, not as bad as it might have been,

03:08and most announcements were as expected.

03:11I think the main one will be the detail of when the capital gains tax rates take effect,

03:16because that will impact on transactions.

03:19If there is a lag until the start of the next tax year,

03:22that could be quite a lot of activity between now and then

03:25in terms of trying to get transactions done to benefit from the lower rates of 20% and 10%.

03:30I guess other questions might be,

03:32what can they do about employers' national insurance rises,

03:35and some things like salary sacrifice schemes and so on

03:39that might allow them to give the same overall package to employees

03:42without it affecting costs.

03:44I suspect questions will come on that.

03:46I think for my specific clients, there were three things that came out today.

03:50The first one, the inheritance tax relief coming down from 100% to 50%.

03:55Again, we need to see the detail behind that.

03:58Is that only on death?

04:00Does that allow lifetime transfer still to be made without an inheritance tax charge,

04:04so what's called a potentially exempt transfer?

04:07Again, the devil will be in the detail behind that.

04:10It might change the way that family businesses get passed on.

04:14It might change the timing of how that's going to happen.

04:18It also might change the way that families have to plan for that.

04:22They might need to insure against it for the future.

04:25Insuring over a long time means that there's a pot of money left,

04:28you don't have to sell the business.

04:30It might mean that some people take the view that they sell the businesses

04:33rather than pass them on, so that on death there is liquidity.

04:36There's actually cash available to pay the inheritance tax.

04:39I think there's two other main ones.

04:41The capital gains tax, the rates have increased.

04:43We all anticipated that, but I don't think they've necessarily increased

04:47as much as we thought they might have.

04:50It's a bad point, but it's a good point.

04:55I think the final one was the bit about maintaining thresholds.

05:00She made that a very positive argument when she was standing there.

05:03It's a very negative one, because for another three years,

05:06we've got fiscal drag.

05:08But the way she delivered it, it suggested that it was a huge advantage.

05:11It's not. It is an easy way of getting more tax.

05:14I think the initial thoughts are that it could have been worse.

05:19I think there are certain areas that haven't been mentioned

05:22in the speech today.

05:24That might come out in the paperwork afterwards.

05:26There might be other things, there will be other things

05:28that will need to be looked at.

05:31For me, I think all the speculation beforehand,

05:37a lot of it hasn't come to fruition.

05:39She's nailed various things very quickly,

05:42and all the speculation that's gone on around about

05:47what the disaster that it could have been as a budget

05:50isn't actually there in the detail.

05:54It sounded quite a balanced budget.

05:56It sounded as if it had been well put together, well thought through.

05:59They've had a bit of time to do that.

06:02I think all in all, it's not as bad as it could have been.

Scotsman Money Budget Round Table

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